Assume the following information: 90-day Ghana interest rate = 4% 90-day South African interest rate = 3% 90-day forward rate of South African rand = GHS 0.3500 Spot rate of South African rand = GHS 0.3550 Assume that the Osei Bonsu Co. in Ghana will need 300,000 rand in 90 days to pay for imports from South Africa. It wishes to hedge this payables position. Would it be better off using a forward hedge or a money market hedge? Substantiate your answer with estimated costs for each type of hedge.

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Assume the following information: 90-day Ghana interest rate = 4%
90-day South African interest rate = 3% 90-day forward rate of South
African rand = GHS 0.3500 Spot rate of South African rand = GHS 0.3550
Assume that the Osei Bonsu Co. in Ghana will need 300,000 rand in 90
days to pay for imports from South Africa. It wishes to hedge this
payables position. Would it be better off using a forward hedge or a
money market hedge? Substantiate your answer with estimated costs for
each type of hedge.

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